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Old 04-29-2012, 12:59 PM   #1
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Fuel Prices..... yea rehash again....

I know there there are people that have a better knowledge of the workings of supply and demand that I do.
But articles like this really make me wonder....
would you not sell more fuel at a lower price where it is generated and at a higher price where it is going to increase sales?

Crude oil stocks in U.S. at historic highs as American gasoline usage declines - The Denver Post

U.S. awash in oil, but global demand drives prices - Houston Chronicle

"Such a glut could force a slowdown of oil production on the North Slope." So decreased supply... higher prices....

Natural gas demand has not decreased ( Historical Natural Gas Consumption by Region, 1965 to Present ) and yet the price has...

Ok, someone that knows, enlighten me.
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Old 04-29-2012, 01:30 PM   #2
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I can tell you first hand " Price fixing" been going on for many years.
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Old 04-29-2012, 02:07 PM   #3
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News reports have indicated that Congress has investigated these charges in the past but found no evidence of price fixing, can you pleas expand on your comments.

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Old 04-29-2012, 02:19 PM   #4
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I have been told what price to sell at and if I did not any and all support would be
taken away.
As far as Congress investigating anything Ha to much self interest involved.
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Old 04-29-2012, 05:12 PM   #5
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I work on the North Slope, the only thing that will shut us down is unfavorable state tax policies.
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Old 04-29-2012, 05:18 PM   #6
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Having government in any country investigate price fixing on oil is like the fox investigating the chicken house over missing chickens. The only way to change it would be for everyone to quit buying gas and diesel, and that will never happen.
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Old 04-29-2012, 05:30 PM   #7
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Quote:
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I work on the North Slope, the only thing that will shut us down is unfavorable state tax policies.
Just because I do not know how it works up there...
If they are bottled up at Cushing OK due to a pipeline that is not going to be built, and 3 refineries on the west coast did not want the remaining 300,000 barrels from that tanker, where is the oil being pumped out of the ground going to go?
"The storage tanks in Valdez were more than 90 percent full the day the Alaskan Explorer arrived with its odd load...", It does not look like they have much more room. I know that is for that day, but a supply back up appears to exist.
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Old 04-29-2012, 05:38 PM   #8
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We have our own storage capacity as does TAPS.
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Old 04-29-2012, 05:50 PM   #9
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Quote:
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Having government in any country investigate price fixing on oil is like the fox investigating the chicken house over missing chickens. The only way to change it would be for everyone to quit buying gas and diesel, and that will never happen.
True that will never happen but if they continue to close refineries there will be none to buy.
( DownstreamToday.com - News and Information for the Downstream Oil and Gas Industry )
"As of July 2011, the estimated population of the states comprising PADD 1 is 116.1 million, which represents over 37% of America's total residents. The refining capacity in PADD 1 is 1.4 million barrels per day, which includes the two refineries that have already been shut, but falls short of meeting the region's consumption"
"The closure of the refineries will result in a deficit of gasoline supply for 2012 and an even larger deficit in 2013. The challenge will be how the industry can eliminate this shortfall. Getting more supply into the region is the primary goal, but if additional supply is not available, or cannot be secured in a timely manner, the gap between supply and consumption will be closed through sharply higher retail gasoline prices." .... so demand is going to be higher than supply... Economics 101 but the ones that are profiting are the ones closing the plants..... am I missing something?
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Old 04-29-2012, 09:44 PM   #10
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The oil companies may not be anticipating a shortage of oil as they have purchased one (1) square mile of land near Patoka, IL and have been building oil storage tanks of 1.5 million gallons or larger for the last three (3) years and the welders are planning on being employed there for at least five (5) more years. I have driven through what parts of the storage area that they allow the public to visit and the tanks are huge.

What the oil companies should be building are refineries, but at a cost of $1 billion each, they would rather shut down the old refineries periodically for "refurbishing" so they can create artificial shortages.

I have also drawn the conclusion that the oil companies do not believe that we have reached the end times in the production of oil or they would not be investing so much money in new storage tanks in the Midwest.
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Old 04-30-2012, 07:57 AM   #11
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That is what happens when you live a a free market capitalistic society. Would you want it any other way? What are the alternatives? I certainly would not like it is someone told a company I invest in how much profit they can make. I would be like telling your employer how much they think your labor is worth.
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Old 04-30-2012, 08:55 AM   #12
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With a post/question like this, anything other than an emotionally inspired response is impossible, especially in a couple of paragraphs.


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Old 05-03-2012, 02:27 AM   #13
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Quote:
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Natural gas demand has not decreased ( Historical Natural Gas Consumption by Region, 1965 to Present ) and yet the price has...

Ok, someone that knows, enlighten me.

You mention demand and price, but forgot the supply part..! We are awash in natural gas (and oil too), thanks to the investment made by oil companies to perfect the "art" of hydraulic fracturing (better known as fraking, though I have no idea where the "k" came from).

As with oil, natural gas prices are set by the market (NOT the oil companies). My house is heated with gas, and the ingenuity of oil companies R&D, as well as their exploration personnel, have saved me lots of money the last couple of years. Plus, many of our power plants are now powered by NG which is a real bargain now. A few years ago, NG was $8+/mcf, while it was below $2/mcf just a few weeks ago.

So, if we are awash in both oil and NG, why is NG so cheap and oil still high? Because of the GLOBAL demand for oil and the LOCAL demand for NG. Demand for oil is high, demand for NG is low. Nobody has made a real committment to NG, because of the relative ease to obtain oil at a fairly competitive price. For instance, how many NG powered cars do you personally know of? If you had one, where would you go to "fuel" it up?

Transportation of NG is more limited as far as global distribution. When you look at the big picture, the relative prices of oil and NG are perfectly in line with what you would expect.
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Old 05-03-2012, 11:40 AM   #14
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Market based economics is not my strong suit. (Mechanical by nature)
So are you saying that basically speculators are driving the extra premium that we are paying for oil?
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